Are Ultrabooks already dead, or just waiting to arrive?

As smartphones and tablets chewed up the market for PCs back in 2011, chipmaking giant Intel made a bold bet to save its core business. Intel poured $300 million dollars into making notebook PCs lighter and thinner, dubbing the resulting products Ultrabooks. Unlike chintzy, low-cost netbooks that offered a barebones computing experience on a small screen, Ultrabooks were supposed to pack the wallop and battery life of a mainstream notebook, but with a form factor that make them almost as easy to carry around as a tablet.

But a year later, there’s no sign consumers or businesses are embracing Ultrabooks. Has the platform fizzled out, or is it just yet to arrive?

What is an Ultrabook?

An Ultrabook isn’t a particular computer or line of computers — it’s just a notebook that meets particular design specs set out by Intel. So far, Intel has laid out two sets of criteria for what constitutes an Ultrabook:

First generation Ultrabooks needed to be based on Intel’s Sandy Bridge processors, offer at least five hours of battery life, and wake from deep sleep in no more than seven seconds. The systems must also include Intel management tools and both anti-theft and identity protection technology. Ultrabooks with 13.3-inch displays and smaller could only be 18mm thick — that’s 7/10 of an inch. Ultrabooks with 14-inch and larger displays could scale up to 21mm thick.

Second generation Ultrabooks retain all the specs of the first generation but move up to Intel’s more-recent Ivy Bridge processors (basically, packing better graphics and smaller size, so they use less power). Second-gen Ultrabooks also require USB 3.0 and have a minimum internal transfer rate for storage of 80MB/s. Notebooks that can be used as either a traditional laptop or flip around to become touch tablet can be up to 23mm thick (0.91 inches) and still be called an Ultrabook.

Plenty of things aren’t specified here. For instance, there’s no requirement for RAM or storage (whether hard drives, SSD, or a mix). Second-generation Ultrabooks require USB 3.0 (native in Intel’s Ivy Bridge processors) but there are no other connectivity or output requirements: Ethernet, Wi-Fi, Bluetooth, eSATA, HDMI, DisplayPort, Thunderbolt — those things and more or all left to computer makers’ discretion. Similarly, screensize is left up in the air, although Ultrabooks’ slim-and-sleek requirements are friendlier to ultraportables rather than notebooks with 15-inch or larger screens. Intel’s processors all come with onboard graphics, but there’s nothing to prevent computer makers from adding high performance third-party graphics — if they can cram them within the space and power requirements. Similarly, there’s no weight requirement.

In other words, Ultrabooks might be a brand, but there’s lots of room for variation — and confusion — about what they offer. For most people, the key word is “thin.”

How have Ultrabooks done?

The first Ultrabooks went on sale about a year ago, with second-generation models appearing on shelves in May and June of this year. By most standards, that’s enough time to gauge how consumers are responding to Ultrabooks. However, computer makers haven’t been breaking out Ultrabook sales separately from their sales of other notebook types, so few direct sales number are available.

What we do know doesn’t paint a rosy picture. In June — just as the second-generation Ultrabooks were starting to hit the market — IDC analyst Jay Chou indicated roughly half a million Ultrabooks had been sold during the first half of 2012, with expectations that a million might be sold by the end of the year.

IHS iSuppli was offering much more enthusiastic estimates of Ultrabook shipments, forecasting that 22 million units would ship by the end of 2012. However, this week IHS iSuppli cut its near-term forecast on Ultrabook sales roughly in half, instead calling for 10.3 million units to ship during 2012. In 2013, IHS iSuppli expects computer makers to ship 44 million Ultrabooks — a big number, but still lower than their previous forecast of 61 million units.

Estimates earlier this year from IDC and Gartner forecast the worldwide market for notebook computer would be between 220 and 230 million units; IDC recently revised that estimate downward to 214 million units. By Chou’s mid-year estimate, that would put Ultrabook sales at less than one half of one percent of notebook computers worldwide for 2012; iSuppli’s forecast would have Ultrabooks accounting for less than five percent of notebook sales worldwide.

Both figures would be a long way from the 40 percent of consumer notebook sales Intel was hoping for by the end of 2012.

Is it all about price?

The most common complaint about Ultrabooks is that they’re simply too expensive. Intel had hoped Ultrabooks would go on sale at prices under $1,000, but some Ultrabooks trend far north of that: HP’s Envy 14 Spectre had a $1,400 starting price, and LG’s X-Note Z330 Ultrabook started at $1,500. A few systems cracked the $1,000 barrier (notably the Acer Aspire S3-951 and HP Folio 13) — but high Ultrabook prices are the norm, not the exception.

High prices for Ultrabooks puts the products between a rock and a hard place. Due to their thin form factors and svelte power requirements, they often sport comparatively small screens (13- and 14-inch screens with 1,366 x 768 resolution is the norm, although a couple like the Asus Zenbook Prime UX32VD scoot out to a full 1,920 x 1,080 pixels). The slim cases often mean few ports: Essentially all Ultrabooks sport USB and Wi-Fi, but if you need VGA output to drive a projector at a presentation, you’re probably out of luck. Similarly, all but a few (high end) Ultrabooks lack optical drives. For many users, that makes Ultrabooks comparable to with traditional ultraportable computers — thin, small screens, few ports — just more expensive. Given a choice between buying two computers with limited options, most businesses and consumers will go for the less-expensive one — and right now that’s rarely going to be the Ultrabook.

Prices are coming down on Ultrabook models: Acer and HP have started aggressively pricing low-end models below $700 — although right now those are models based on the first-generation Ultrabook spec, so they don’t necessarily represent the latest technology. They also ignore the unibody aesthetic Intel has been promoting for the brand: low-end Ultrabooks tend to sport a fair bit of plastic. Pricing on Ultrabooks based on the first-generation spec should dip below $600 by the end of the year — some deal sites are already on that threshold.

Long live the “ultrathin?”

There’s no reason every thin notebook has to be an Ultrabook. In fact, the Intel’s Ultrabook effort has effectively created another category of notebooks dubbed “ultrathins” — notebooks that look an awful lot like Ultrabooks but don’t qualify for one reason or another. Maybe they’re just a smidge too thick because they include an optical drive or a VGA port, or maybe they’re based on AMD’s Trinity processor instead of Intel’s chips. Whatever the reason, they’re still thin and more portable than traditional notebooks — and often cheaper than Ultrabooks.

In the long run, Intel might be just fine with that.

“Whether or not the system is an “Ultrabook” or not, in the long run, may not be a worry for Intel. What they want to accomplish is getting the PC industry to innovate new designs and engineering (like ultrathin, ultralight, convertibles, touch screen, etc.) that will better compete with the other new computing gadgets (like the tablet or smartphone),” said IHS iSuppli’s Craig Stice, via email. “If the PC industry can accomplish this and continue to grow (with or without the need for a branded Ultrabook), the PC industry and Intel wins.”

Are Ultrabooks about to take off?

Another reason Ultrabooks have been slow to engage is that the personal computer market has been essentially flat this year, as consumers drift towards smartphones and tablets and many would-be buyers are putting off purchasing new gear until they see what Windows 8 will bring them.

If Windows 8 resonates with consumers, it may spark Ultrabook sales. The launch of Windows 8 is expected to usher in a new generation of Ultrabook products, many of which will be convertible tablets: They can be used like traditional clamshell notebooks, or detach their screens and function as touch-enabled tablets. At the Intel Developer Forum last month, the company reportedly claimed some 70 Ultrabook designs are in computer makers’ product pipelines, and 40 of them sport touchscreens.

Microsoft’s Windows 8 launch, and Microsoft’s corresponding marketing push, should expose Ultrabooks to more buyers. At the same time, first- and second-generation Ultrabook models will likely come down in price, potentially bringing additional interest from consumers are well as businesses that have been putting off new computer purchases.

Looking forward, the next revision of Intel’s Ultrabook specification — which will be based on Intel’s upcoming Haswell processor — is expected to land in mid-2013. Haswell will be the first processor chip Intel has actually designed with the Ultrabook platform in mind: They’ll have even lower power consumption than current Ivy Bridge processors, and Intel is working on an even lower-power version designed with convertible tablets in mind. Haswell-based Ultrabooks will also feature scalable graphics (including support for DisplayPort 1.2 and 4K video output).

However, these Haswell-based systems are likely to debut at the high end of notebook pricing — just like most of today’s Ultrabooks — which means they may face the same issues.

Bottom line

Intel is not going to give up on Ultrabooks. In fact, you can expect the company to push the platform even harder with the launch of Windows 8 this month and the debut of Haswell processors in mid-2013. However, the leading edge of Ultrabooks are almost certainly going to remain specialized products with high price tags. If Ultrabooks ever go mainstream — and capture that 40 percent of the consumer notebook market Intel expects — it will be because prices on previous generations of Ultrabooks have fallen to points where they can successfully compete against traditional notebooks and ultrathins.